Elevator maker Kone's third-quarter orders beat expectations on strong China

(Reuters) - Finnish elevator and escalator maker Kone reported on Wednesday better-than-expected new orders for the third quarter, boosted by strong momentum from its key Chinese market.

Kone's orders received fell by 7.7% to 1.99 billion euros ($2.10 billion) in the quarter, but that slightly beat analysts' estimate of 1.98 billion euros in a company-provided poll. At comparable exchange rates, the orders were up 0.3%.

The company's shares were up 3.9% at 1023 GMT after it posted the quarterly data.

"Orders received were stable, which I consider a good achievement given the soft overall New Business Solutions market," CEO Henrik Ehrnrooth said in an earnings statement.

JPMorgan said in a briefing note that the strong order momentum was "supportive" in an earnings report that was on the whole "weaker-than-expected".

Kone, which makes about a third of its sales in China, had earlier said it expected the new equipment market in the country to decline between 10% and 15% this year.

Due to its bigger exposure to China, the Helsinki-listed company would be more vulnerable to that than its Swiss rival Schindler. The Chinese market makes up about 15% of Schindler's sales.

Schindler last week raised 2023 guidance after a 23% jump in quarterly profit, driven by growth in maintenance and other services.

Kone reiterated its business outlook, still expecting its sales growth at comparable exchange rates for the year 2023 to be in the range of 3.0%–6.0% and EBIT margin (earnings before interest and taxes) to be in the range of 11.0%–12.0%.

Earlier on Wednesday, Kone also appointed Philippe Delorme as its new CEO, saying he would take over from Ehrnrooth from Jan. 1. JPMorgan said it was an "excellent appointment for Kone".

Kone on Tuesday said it had completed selling its Russian operations to a Russian holding company S8 Capital.

The company said in March 2022 that it would cease deliveries and not sign new orders, announcing plans to divest its business and operations in Russia three months later.

Its adjusted EBIT rose by 3.3% to 315.9 million euros in the quarter, missing analysts' estimate of 329 million euros.

(Reporting by Elviira Luoma in Gdansk; Editing by Milla Nissi and Helen Popper)